As wind power penetrations increase in isolated power systems, more innovative and sophisticated approaches to system operation will need to be adopted due to the intermittency and unpredictability of wind power generation. In this paper, a hybrid approach of combining branch and bound algorithm with a dynamic programming algorithm is developed to coordinate the wind and thermal generation scheduling problem for operating an isolated hybrid power system reliably and efficiently. Several technique constraints are applied to determine the maximum proportion of wind generator capacity that can be integrated into the system. A simplified dispatch based on the direct search method (DSM) is also introduced to relieve the computational burden further. Numerical experiments are included to understand the wind generator capacity in production cost analysis and to provide valuable information for both operational and planning problems.